IMF says it expects Ukraine to keep paying debt despite default speculation
The International Monetary Fund expects Ukraine to continue to service its foreign debt, an IMF spokesman said on Thursday as speculation grows that Kyiv could default on its debt as its battle against Russia's invasion rages on.
At the moment Ukraine is servicing its debt in an orderly way, IMF spokesman Gerry Rice told a scheduled news briefing. "We would expect that to continue."
He said the Fund sees international community grant financing as a priority for the immediate and short-term, as "that would allow the Ukrainian government to remain operational without incurring further debt."
Ukraine's state-owned gas company, Naftogaz, asked its international creditors earlier this week to allow for a two-year deferral on debt payments, fueling bets that the sovereign could follow.Creditors were urged on Thursday to reject the company's request.
A senior U.S. Treasury official, asked about the possibility of a Ukrainian default, said that would not be surprising given the damage the war has caused, but it was still too early to gauge the extent of the damage.
The official spoke to reporters during Treasury Secretary Janet Yellen's trip to a G20 finance meeting in Indonesia, where the Ukraine war will be a key topic of discussion and a source of discord within the group of major economies.
Ukraine's economy and government revenue have shrunk significantly since Russia's invasion in late February, and G7 wealthy democracies have pledged some $20 billion in support to keep Ukraine's government operating over the next few months.
Ukrainian officials have said that maintaining debt service was important for the country to be able to attract investment after the conflict ends. But Ukrainian presidential adviser Oleh Ustenko said in June that Kyiv will need to start discussions with creditors on external debt restructuring if the war with Russia continues for a long time.
He said the Fund sees international community grant financing as a priority for the immediate and short-term, as "that would allow the Ukrainian government to remain operational without incurring further debt."
Ukraine's state-owned gas company, Naftogaz, asked its international creditors earlier this week to allow for a two-year deferral on debt payments, fueling bets that the sovereign could follow.Creditors were urged on Thursday to reject the company's request.
A senior U.S. Treasury official, asked about the possibility of a Ukrainian default, said that would not be surprising given the damage the war has caused, but it was still too early to gauge the extent of the damage.
The official spoke to reporters during Treasury Secretary Janet Yellen's trip to a G20 finance meeting in Indonesia, where the Ukraine war will be a key topic of discussion and a source of discord within the group of major economies.
Ukraine's economy and government revenue have shrunk significantly since Russia's invasion in late February, and G7 wealthy democracies have pledged some $20 billion in support to keep Ukraine's government operating over the next few months.
Ukrainian officials have said that maintaining debt service was important for the country to be able to attract investment after the conflict ends. But Ukrainian presidential adviser Oleh Ustenko said in June that Kyiv will need to start discussions with creditors on external debt restructuring if the war with Russia continues for a long time.
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
